My preference is to foil the pan and leave it dry. I used to use water, but it took a lot longer for the cooker to heat up and was always a pain to clean up. After going dry, I really didn't notice a difference in the moisture of the meat. Although if I ever decide to go back to using the water, I will definitely take Cayman1's advice and spray with Pam before filling.
RecTec, WSM 18.5, BBQ Guru, Weber OTG, Smokenator, Pit Barrel, Maverick ET732, Gray Thermapen